Sales and Use Tax Annotations

Annotation 330.1878

(a) IN GENERAL

330.1878Assignments. In sales and use tax matters, the language used by the parties to characterize their transaction does not in itself necessarily control. Therefore, despite the language of assignment contracts, a taxable sale occurred if other evidence indicated that title in fact passed from transferor to transferee. Such other evidence would include the following factors:

(1) Whether transferor or the transferee retained title in the property after the payments to the transferee were completed;

(3) Whether the parties treated the transaction as a sale or a loan for income tax purposes, and, more specifically, whether the transferor or the transferee claimed depreciation, investment tax credit, or similar deductions predicated upon ownership of the property; and

(4) Whether the putative interest rate, if the transaction were treated as a loan, would be usurious under California law. 1/16/87.